ANZ to tap into China with UnionPay deal

ANZ has signed a tentative agreement with China UnionPay, one of the world’s largest payments system operators, allowing its customers to tap into UnionPay’s extensive network in the Asia Pacific region.

However, the Asia-focused bank is playing a catch-up game against its big four rivals in allowing UnionPay card-holders-- nearly all of China’s bank customers and a key source of tourism revenue--to access its ATM and merchant network in Australia.

NAB and Commonwealth Bank both have agreements with UnionPay, allowing Chinese cardholders to spend cash with merchants of their networks. In fact, NAB has been leveraging its relationship with UnionPay as a point of difference to its competitors.

As reported by BusinessDay last year, key entertainment and shopping destinations including Crown Casino, The Star in Sydney and Phillip Island have switched their transactional banking services to NAB to gain access to UnionPay cardholders.

ANZ Australia chief executive and head of global retail Philip Chronican said the partnership with UnionPay would ‘‘make it easier for our customers to make payments as they travel and conduct business through the region.’’

Mr Chronican also indicated the new agreement would likely provide a boost to its retail customers in China as they engage in more trade, tourism and migration businesses with Australia.

According to the Australian Bureau of Statistics, Chinese tourists are visiting Australia in a record number and it is the most important growth market. Tourism Australia aims to double the number of Chinese visitors to Australia by 2020, increasing revenue from $4 billion to $9 billion.

An average transaction on Unionpay cards in Australia is approximately $800 compare with $120 to $130 on Visa or MasterCard, according to Unionpay data.

Victoria’s China Tourism Strategy, a state government initiative, has identified the accessibility of appropriate financial transaction facilities for Chinese visitors such China Unionpay as one of its key objectives.

BusinessDay understands banks need to invest considerable resources to upgrade its systems in order to accept UnionPay cards. It is one of the reasons that ANZ has been slow in sealing a deal with the Chinese payments operator, according to a source close to the bank.

China UnionPay is the third-largest bankcard issuer in the world after Visa and MasterCard. UnionPay is majority owned by the big four state-owned Chinese banks.